HC Deb 05 July 1960 vol 626 cc365-7
Sir E. Boyle

I beg to move, in page 39, line 30, to leave out from "effect" to "as" in line 31 and to insert: and be deemed always to have had effect". It may be convenient with this to take the Amendment in page 39, line 34 at the end to add: and an election for the purposes of the said subsection (3) relating to a premium paid after the end of a year of assessment and before the date of the notice of assessment for that year shall in no case be out of time if made before the end of February, nineteen hundred and sixty-one". I can assure the hon. and learned Member for Kettering (Mr. Mitchison) that these two Amendments arise directly out of questions put to me by my hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) during the Committee stage.

When we were debating Clause 40, my hon. Friend pointed out that the Clause was drafted to correct an error which could have been to the disadvantage of the subject. In his view, it was only equitable that the error should be put right as from 1956, when it was made. I have consulted my right hon. Friend on this matter and the new Resolution which the Committee passed a few days ago and these Amendments are the result of our considerations.

The first of the Amendments provides that Clause 40 shall be deemed always to have had effect and the second Amendment is consequential and extends the time limit for making elections under Section 23 (3) of the Finance Act, 1956, in cases to which Clause 40 applies.

Mr. Diamond

Is it not perfectly clear that we are now dealing with the reverse side of the Government's coin which does not often see daylight? I drew the attention of the Committee on previous Amendments to the Government's refusal to tarnish their pure and clear policy of avoiding retrospection at any cost because we were about to come to these Amendments in which the Government propose retrospection for two years and for which we have had no explanation.

We had a very full explanation from the Financial Secretary about the stripper when it came to making absolutely sure that those who were helping those engaged on dividend stripping could rely on the Government's promise not unduly to interfere in their activity, and he made it perfectly clear that he set great store on the Government's new policy of not having retrospection in any circumstances. Will the hon. Gentleman now explain why somewhere between 1955 and 1958 the Government's view on retrospection changed?

9.45 p.m.

In 1955 they promised, with very brave words, through the Minister of Housing and Local Government and the Financial Secretary himself, not to hesitate to introduce retrospective legislation. In 1958, as we now understand the Financial Secretary, they said, "We have changed our minds; we are wholly against retrospection." In 1960 they produce an Amendment which deals with matters retrospectively to 1958. We are getting into considerable difficulty with regard to the Government's principles on retrospection. Have they any principles in the matter, or are they merely out to help the tax dodger and not to have regard to their other responsibilities?

Mr. Powell

What my right hon. Friend the Chancellor has done here is of no small importance, although it probably affects very few people. Although hon. Members on both sides of the Committee understand very well what they mean, they talk loosely about the wrongfulness of retrospective legislation. By this they mean the wrongfulness of retrospective legislation which imposes a burden or penalty, or some disadvantage upon the subject. Nobody has ever supposed that there was any objection to retrospective legislation which indemnified or relieved the subject, and that is what we are doing here. We are relieving him from the effects or an error made by this Committee.

It is of no small importance that my right hon. Friend has gone to the trouble of putting down a new Ways and Means Resolution in order to make the Amendment possible, and deliberately seeing that the correction of this error went back to the point of time when it was committed. There is no contradiction at all between what is being done here and our objection to retrospection which is to the disadvantage of the subject. I am sure that I speak for all hon. Members on this side of the Committee when I thank my right hon. Friend for his attention to the point.

Mr. Mitchison

Some day I shall write an essay on the place of retrospective legislation in a property-owning demotracy.

Amendment agreed to.

Further Amendment made: In page 39, line 34, at end add: and an election for the purposes of the said subsection (3) relating to premium paid after the end of a year of assessment and before the date of the notice of assessment for that year shall in no case be out of time if made before the end of February, nineteen hundred and sixty-one ".—[Sir E. Boyle.]

Clause, as amended, ordered to stand part of the Bill.